ZymoGenetics lands loan; BofI latest bank to eye openings; Raptor closes; Groundstar plans offering

By Kenneth Lim

Boston, June 30 - ZymoGenetics, Inc. said it secured a $100 million loan commitment from an investor that it will use for its key bleeding treatment.

BofI Holding, Inc. is the latest bank raising money to take advantage of opportunities in the finance sector, offering $14 million worth of stock through a private placement.

Raptor Pharmaceuticals Corp. said it closed a previously announced $10 million offering of units to provide critical funding for its development programs.

In Canada, Groundstar Resources Ltd. said it is raising up to C$15 million for exploration purposes.

ZymoGenetics secures loan

ZymoGenetics said it entered into a loan commitment agreement with Deerfield Private Design Fund, LP.

The five-year loan will bear interest at 4.9% per year. ZymoGenetics may draw on the funds at any time through Jan. 27, 2010 in $25 million tranches.

As part of the deal, Deerfield may receive warrants for 4.5 million common shares, with warrants for the first 1.5 million shares given at the first draw down. The six-year warrants will be exercisable at 125% of the applicable 15-day average selling price of ZymoGenetics common stock.

ZymoGenetics shares (Nasdaq: ZGEN) slipped 0.82% or $0.07 to close at $8.42 on Monday.

ZymoGenetics is a Seattle-based pharmaceutical company whose key product, Recothrom, is an approved treatment for bleeding. Each tranche that the company draws also entitles Deerfield to a royalty of 2% of Recothrom net sales.

The proceeds will be used for development programs.

"This transaction significantly increases our financial strength and provides capital that we'll use to build our Recothrom business, including the potential development of Recothrom line extension products," ZymoGenetics chief executive Bruce L.A. Carter said in a statement. "We're pleased with this vote of confidence from Deerfield, a highly knowledgeable and successful healthcare investment firm."

ZymoGenetics chief financial officer James Johnson also stated: "We believe that this transaction with Deerfield is structured to benefit our shareholders in several ways. ZymoGenetics gains access to a significant amount of capital at a competitive cost; there is flexibility in amount, timing and duration of borrowings; and shareholder dilution is minimized. Assuming success in building the market for Recothrom and in carrying out our business development objectives, this added capital should fund our company well into the future."

BofI sells convertibles

BofI said it sold $14 million of its series B 8% cumulative convertible perpetual preferred stock in a private placement.

The preferreds were sold at $1,000 apiece. They are convertible into common shares at $9 per share.

BofI common stock (Nasdaq: BOFI) closed at $7.39 on Monday, up by 1.93% or $0.14.

The deal consists of several tranches that will be completed by July 31. The first tranche of $3.75 million settled Monday.

BofI is the San Diego-based holding company for the Bank of Internet USA. It will use the proceeds for general corporate purposes.

"The decision to raise capital now was based upon the strength of our balance sheet and the opportunities for profitable growth," BofI chief executive Greg Garrabrants said in a press release. "Unlike many banks raising capital to support the deteriorating credit of their loan portfolios, BofI sees strong opportunities in this market place. The disruption in the mortgage markets has created a unique moment to acquire quality mortgage loans and securities at attractive yields."

"I expect BofI's earnings to increase by more than 70% in our June 30, 2008 quarter compared to our last quarter ended March 31, 2008," he said. "The improved earnings are driven by increased net interest margin which I expect to exceed 2.35%, up 59 basis points or 33.5% from the net interest margin of 1.76% recorded for our last quarter ended March 31, 2008."

BofI is the financial institution to raise money hoping to take advantage of unrest in the financial sector. Hudson Holding Corp. recently sold $4 million worth of stock also with an eye on opportunities in the sector.

Raptor raises $10 million

Raptor Pharmaceuticals said it raised $10 million through its stock-and-warrant offering, which was announced in May.

The company settled the initial $2.21 million tranche on May 22. A total of 20 million units at $0.50 each have been sold. Each unit comprises one common share and on half-share warrant. One whole two-year warrant is exercisable at $0.75 in the first year and at $0.90 thereafter.

Raptor is a Novato, Calif., biotechnology company that bioengineers novel drugs and drug-targeting platforms derived from the human receptor-associated protein and related proteins.

The proceeds will be used to fund Raptor's drug programs.

"We are pleased to have closed this private placement, especially given the challenging financing environment for development-stage biotech companies," Raptor chief executive Christopher M. Starr said in a statement.

"We are excited about using the proceeds from this transaction for the advancement of our clinical programs, which we acquired within the past 10 months and our internally developed preclinical programs. In the next six to nine months, we expect to have three clinical trials in progress including two trials addressing orphan indications."

Raptor chief financial officer Kim R. Tsuchimoto added: "This funding is critical for the execution of our drug development programs. We are grateful to our existing and new investors who support our passionate efforts in bringing safer and more effective therapeutics to market."

Groundstar to raise C$15 million

Groundstar Resources plans to raise up to C$15 million through a private placement of special warrants.

The company hopes to sell up to about 16.7 million special warrants at C$0.90 each on a best-efforts basis.

The agents, co-led by Blackmont Capital Inc. and Haywood Securities Inc., have an over-allotment option for an additional C$2.5 million.

Each special warrant will become exchangeable for one common share and a half-share warrant upon registration approval or four months and a day following settlement, whichever occurs first.

If registration is not carried out within 60 days of closing, each special warrant will be convertible into 1.1 common shares and 0.55 warrants. Each whole warrant is exercisable at C$1.15 for 18 months.

The warrants may expire sooner if the company's shares close higher than C$1.40 for over 20 consecutive trading days.

Groundstar common stock (TSX: GSA) gained 1.05% or C$0.01 to close at C$0.96 on Monday.

Proceeds will be used to fund ongoing exploration and development activities and for general corporate purposes.

Calgary, Alta.-based Groundstar is an oil and natural gas exploration company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.